tv Bloomberg Surveillance Bloomberg January 21, 2014 6:00am-8:01am EST
predicting stocks will continue rising. we speak with one who is urging caution. personal battle, hiring someone to help you. the ceo of one weight-loss company helps stick to your new year's resolution. good morning, this is "bloomberg surveillance." this is tuesday, january 21, i'm scarlet fu. joining me as michael mckee and adam johnson. tom keene is in dallas for the world economic forum. davos for the world economic forum. >> in honor of tom being in davos, we will start with europe. sap, the big software company, shares are falling the most in six months. they're basically pushing other profitability target for another two years as companies shift to the cloud. we will have the co-ceo bill mcdermott join us in about half an hour. the u.s..rnings in before the bell, verizon, d,
.ohnson & johnson johnnie john is what we used to call it. >> i said, call me johnny john? >> no, but that goes back to my trading floor days. ibm and texas, instruments. something i want to make sure everyone is aware of, 9:30, bill gates will be sitting down with bloomberg lp founder and majority owner michael bloomberg , a conversation moderated i betty liu. this is huge, talking about how to make the world a better place? how do you fight poverty? these are two guys who are in a position to do it. >> we look forward to that one. there is a storm of swords approaching, isn't there? >> i hear that. >> he doesn't believe it. time andt caught last you're like, this is no storm. >> in the city, it was not a big
deal. i'm sorry. >> let's do a data check. if you're in or not to trade, you're going to be coming into a green screen this morning. equity futures higher at the moment. 4 points,utures up by dow futures by 51. a nice game. 10 year yield running in place. euro-u.s. dollar, no real change, little bit of a movement. nymex crude is going up. you can see that reflected in other parts of the energy complex. natural gas futures are a little higher this morning. if you live in boston, look at that, that is not good news. you're going to get snow and pay for it. take a look at a couple of currencies. the chinese yuan is now coming back down. it had strengthen almost to 6. it is said to go the other way
for a while. we thought we would check on thesuisse. tom keene, good news, you can spend a little more time at the on the company card. >> we expect gifts from tom. chocolate for everyone. we have scoured the papers and web. this came out yesterday, but something were still absorbing, deutsche bank reporting surprise fourth-quarter loss. it does signal a problem for other european banks. it was caused by a surge in legal costs. lore fixed-income trading as well. >> what is fascinating to me, jpmorgan and a lot of the banks have been taking hits on mortgage backed securities our soldiers ago, and now we're finally, finally starting to hear the same out of europe. 14-whate europe is on a time delay. >> have a major stress test from
the ecb. everyone is trying to clean up their books ahead of that. rates suppressed interest and declining demand for banking services overall in europe. the stock is recovering a little but after tumbling 5.4% yesterday. we are also taking a look at media m&a because verizon will buy intel start up called on q. no word on the price tag but the story is intel began looking for a buyer last year rather than investing programming a bring it to market on its own. this is a service designed to overde pay-tv programming any high-speed connection. it is all about cutting the cord. >> iwatch bloombergtv on my iphone. think i understand why all of the other networks aren't you doing it, because they want the carriage fees. if you are a cable provider or if you are at&t, you ought to book up the content guys and get them on the device. that is where this is going. no one is willing to make that jump yet. verizon iswhat
doing. it is something we will look at. no word on the price tag. our last front page story, bloomberg.com, a new poll that shows international investors are more upbeat about the economy than they have been an almost 5 years. 59% of respondents of the global economy is improving, up from the three percent in november and the distinction is there is growing confidence in the u.s. and other rich nations rather than basing it on strength in the emerging markets. >> people have been getting more optimistic. people are starting to market their earnings forecast because consumer spending has been so strong. >> it is certainly one area we will look at. our guest host for the hour with black she is in the minority percentage. >> tina martin adams from wells fargo. she was staunchly bearish in 2013.
she says, forget consumer staples and energy tech is where the growth is. when you look at something like the bloomberg global investor poll that shows in general, 72% of people say the u.s. economy is improving, why would you want to stay bearish? >> our stance is more about the multiples than about economic growth and proving earnings, improving typically in the year when he fed policy for stocks have a tendency to suffer and we have a year on our hands in which the fed is going to scale back, data policy. i think this will be a year more of consolidation that absorbing the gains we've had for the last several years. we saw it last year that the fed would scale back and it did not happen -- we thought last are --the fed would scale back at it did not happen. talks when you're looking to the end of 2014, and i realize that is a full scan, i'm sure your confidence level is low, but are you pretty -- by the end of the year, falling back to your target?
a good day and we could be there. fair value estimate. over the year we expect earnings to grow 7% but we expect that to be offset by some multiple contraction as investors absorbed the fed, data policy sort of scaling back and ultimately ending. it is a fair value estimate. zero percent growth in a repressed returns with about a 2% -- >> are you calling for a tread water throughout the 12 months or do we go up and back down again? >> i think we could easily see as low as 1500 on the index. we could see as high as 2100 on the upside. i think it will be a more volatile year, as is very typical in years in which we are absorbing a change in monetary policy. of the waybout 1/10 to earning season. what is your read so far? >> it is decent. i was a their one big standout is how much companies are guiding lower. >> like a multiyear high,
negative to positive ratio, eight to one. >> it is stunning. we have gone through the last turn have for the guidance ratio has ticked higher and higher. this is off the charts high. >> why our company so negative? >> i think they're having a difficult time keeping up with expectations. you talked about having 55% of people surveyed suggest everything is getting better. betters have also seen on economic side and thought this has got to filter through to corporate earnings. well, corporate are having a difficult time taking more market share, continuing to press margins higher from continuing to meet those higher and higher expectations. i think that is a lot of what happened in the fourth quarter. that and suddenly the consumer spending outlook shifted all of it. a lot of what we've seen in terms of negative that it is with respect to consumer with a decent holiday season, but not gangbusters. >> to me right off significant increase in hiring or spending?
>> i think we will get decent hiring. i think we will get some increasing cap spending. i don't think it will be phenomenal. i think a lot of this year will be about managing expectations, which has evidently accelerated and companies have to kind of rain is then a little. continue this conversation but scarlet is going to give us company news right now. >> rebound in emerging markets, unilever singh sales rise 4.1% last quarter. analysts were looking for a 3.9% increase. sales have been slipping, but rebounded with almost 8.5% growth in the period. the drinks industry has been three times on deals this year as it did for all of last year. the pickup in activity follows what was the slowest year in jail making in the business and
honest two decades. new charges in the legal battle between the u.s. government and s&p. the chairman of mcgraw-hill financial says timothy geithner vowed the government would respond to as abuse downgrade of u.s. debt in 2011. across crossing the former treasury secretary called him are called and told him s&p would be held accountable for that ratings downgrade. the call was disclosed in court filings in u.s. lawsuit against s&p. the drama continues building. be a bit for ibm server business. we will tell you who might be looking at pulling this out of the blue. amazing how they're are remaking the company into the software business. a bloomberg exclusive, bill gates will be sitting down with former new york city mayor mike bloomberg and also the owner of bloomberg lp, majority owner, today at 2:00. ♪
>> an exclusive with bill gates, microsoft chairman and founder will be sitting down with mike bloomberg today at 9:30 a.m. eastern right here on bloomberg television. >> this is "bloomberg surveillance." mckee with scarlet fu and adam johnson. tom keene is chocolate shopping in switzerland, we presume, therefore the davos conference. tech bellwether ibm slated to report fourth-quarter earnings this afternoon but the story everyone is talking about is lenovo group in talks to buy ibm's low-end server business. the whole ibm question, because ibm has been shedding hardware the last couple of years to get into software and services committees higher profit margin business. the issue here is it is selling
this is potentially too lenovo. a deal could be signed within weeks according to bloomberg reporting. they actually got pretty close a couple of years ago but could not agree on a price tag, so that kind of held back and now they're getting to that point again. >> a also bought the think book this mess a while ago, so they have a relationship. >> they do. that is why people are saying this is a natural fit for both. what is interesting is for ibm, it needs to report some growth in sales because it has already posted six straight quarters of slowing sales. the fourth quarter should be a seventh straight quarter. the ceo has a did the fight the cloud as an area of opportunity for many area of growth for the company, but it requires a lot of upfront investment and also the revenue generation that it creates is not as steady as before. >> instead of customers buying software upfront, they now get to spread it out because they're
paying for it over the cloud over time. it kind of messes things up. the earnings on this company 8%, 9%, 10%. sales have been flat. >> sales have been flat. the estimate is for earnings to reach $20 in 2014. >> you wonder, how much juice can you squeeze out of the fruit? if you don't have the topline growth, i mean -- >> let's bring in gina martin adams from wells fargo. i know you have been looking at tech because you switched from underway to overweight and technology this year. intel has given us a heads-up that things are not looking so great in terms of revenue. ibm warned about sales in china. is there a tech bellwether anymore? >> good question. i think you have to look at tech edits multiple parts. every segment does have a bellwether. you have google, for example, into hardware, cisco
medications equipment. i think each segment potentially has a bellwether, but i don't know if you can point to one company as an example of the sector. you talked about intel having a relatively difficult outlook or quarter. masks what is happening across tech. one of the great part of this earnings season is tech revenues are increasing a lot more than analysts expected. >> and not through mergers and acquisitions. >> right. we are still early, but of the nine companies that have reported, 8 have been on the topline. >> is this about the capital expenditures that were held back for so long starting to return? >> it is a little bit of that, little of the consumer. just enough that expectations for tech specifically had been beaten down and now we have just enough spending to be those expectations. >> how our margins, in? >> it is enough. earnings are not as positive as sales so far in terms of beating the expectations number's, but earnings are still beating. >> this idea of getting your
numbers in line from cost- cutting, we have heard ibm cut a lot of jobs and other tech companies doing the same. how much more juice is there left to squeeze? >> and tech, it is quite a bit. >> era still more? -- there is still more? because of theis sector transitions away from hardware into software and services. software and services has much more room to cut. companies are shedding segments. that will change the prophet picture significantly. a 15-vertime has shown year trend of accelerating margins. i don't think you want to fight that trade. >> what about health care, which is another sector you have been eyeing? is there room to cut costs there? >> absolutely. health care has been one of our favorite sectors for three years. this year it is more about topline growth for us than it is about margins accelerating. i do think there's plenty of
room for margin growth in health care as well. laggards of the cycle. health care, consumer staples can show the system margin growth over the next -- >> looking for a catch appearing in the year 2014. gina martin adams is our guest host for the hour. cofounder microsoft ok's will be sitting down with michael bloomberg for a conversation on the importance of giving back and his efforts around the world. that is this morning at 9:30 a.m. on bloomberg television. there brings us to our twitter question of the day -- this is "bloomberg surveillance." ♪
>> good morning, this is "bloomberg surveillance." davos,ne is in switzerland. mike has our top headlines. >> antigovernment activists and police battling in kiev. protesters bombarded police with molotov cocktails. police returned fire with rubber bullets and smoke ons. protests that rocked the corinthian couples in slate last chapter the companies does countries president rejected cooperation with the european union. takes back itson invitation to iran to attend peace talks on syria. the invitation to iran angered opposition is as well as the u.s.
the peace conference is scheduled to begin tomorrow in geneva. a delegation representing syria's opposition will attend. at the box office, "ride along" took the number one spot bringing up 48 million dollars in ticket sales over the holiday weekend. second place goes to "lone ."rvivor >> another must read, bill and melinda gates and a letter. don't gates talks about the myth blocks progress for the poor. he goes into detail. one i picked out that i thought was interesting is he right -- this idea really goes back to the tech egos of you can always build something better to improve the situation your in rather than wallow in the
current situation. i really thought a combined both his worlds nicely. strands ofe two debate. one is been talked about in a long time for, yes, we are getting progress. more people have been lifted out of poverty the last 30 years than the last 3000 years. >> he points out good news happens in slow motion. people don't appreciate that enough. >> the other gets to your point, some people say that bill gates for all his good intentions, is not having as much of an effect as he would like because he relies too much on the idea that problems.olve all the sometimes it is just giving the man a one dollar and a hoe and teaching them to form. >> to get that one charity in africa him a just digging wells of people get clean water. it isnot technology, but saving lives. we don't think about that here. just clean water, what a difference. an african village once with larry summers and they had their first clean water well.
it was a huge deal. it will improve the health of the people there tremendously. >> this is something we will discuss further when bill gates sits down with michael bloomberg and 9:30 on bloomberg television, discussing philanthropy and their efforts to change the world. mike, you have a fun morning must-read. >> we have to talk about football because we were not here yesterday. i broncos won and peyton manning was a euro. they ran up a huge offense a victory over the patriots. 500 yards -- more than 500 yards in offense, 400 yards for patent passing. they often sport denver. seattle wins, shutting down the 49ers at the end of the game, three turnovers. >> i have a couple of boys in my house. >> celebrating the game, the two best teams in the league. she writes --
a lot of people will be interested in this game. peyton manning is said to be the favorite. but the two best teams in the league all your are in the super bowl. >> gina martin adams, what team are you rooting for? peytonuld like to see take a ring. it is a great story. he has made a huge comeback. he is a fantastic i. being booted out of indianapolis after the injury. god bless him. >> we will be right back with the number one resolution across the country every year -- weight loss. ♪
you are looking at a live shot of washington, d.c. it is not snowing yet, but they have already declared a snow day. federal offices are closed in anticipation of a major snowstorm along the east coast. this is "bloomberg surveillance." i am scarlet fu with michael mckee and adam johnson, tom keene is in davos. >> we already have another government shutdown, can you believe it? >> but this is caused by mother nature. >> i believe it. >> the markets are still operating, even if people aren't necessarily going to all be at work. there are a lot of early school closings and the new york city area. s&p futures and dow futures higher on the morning.
not a lot of movement in the euro at the moment, but there is a movement for nymex crude. we're seeing the whole inergy complex going up a bit. heating oil going up a lot this morning. cold,is going to be very so stay warm. this is a tale as old as time. you overindulge jenna holiday overindulge in the holiday season and swear you're getting back in shape on january 1 and bite generate 20th -- and january 20, you follow. metta fast seo is one of the guys leading the charge. he joins us right now. mike, i am a wrestler. 20 poundshave to drop between football and wrestling season. i did it by fasting. why shouldn't i just got eating?
why do i need this? >> basically, this is a meal replacement were you do 5 meals during the day that are only 110 calories, high in protein, great nutritional content for then you mail, lean and green wetherbee chicken, fish, at dinner. and you'll lose two to five comes the first week. 50 million bars are sold by us every year. they're very simple and easy to use. easy to use for traveling. it is a simple program. you're not counting calories are doing a lot of things that are complicated. you'rely is the food eating versus taking drugs or other things. it is safe. >> it is healthier than fasting? >> i would say people like to eat. we are trying to make products like macaroni and cheese, spaghetti, things that made you fat that you like to eat, that you would write to continue to eat. we are trying to reach the consumer with products that they
enjoy. do we know yours works better than any of the others? there are at least four companies in this space. >> i think they all have good programs, but i think ours -- ours has been rated the third most effective diet and we were one of the only big four to be in the third position. we feel the outside groups are giving us good ratings. the other thing about us, we model.om a doctor's we have high credibility. 500 doctors recommend our products. we have 11,700 people who have products, 1200 doctors and 1200 chiropractors who all recommend our products to their patients. >> you say they endorse it, but how much of the bars, the meals, are driven by science? >> we actually have research around hours. we were developed out of johns
hopkins, the weight management center in baltimore. we have a lot of scientific research. we have studies that show the effectiveness of the product to justify our claims. .com and these doctors enough to overcome jessica simpson and melissa joan hart and these other celebrity endorsers of your rival programs? >> we don't use celebrities because i'm a basically, the people who use our program think celebrities have gym memberships, trainers. >> and they do. >> basically, we are trying to focus on the everyday person. use people ads, we who have used our products who have lost the weight, and we feel that is far more credible for the average person to see what can be done. underlyingthe philosophy, total number of calories consumed and you basically help someone get to that by pre-measuring it for them? or is it the quality of the ingredients in the food? >> it is a combination of both.
the food is all one hundred 10 calories. for five meals you're only taking 550 calories. with your evening know, you might go to 1200. >> typically, 2000 calories is your typical u.s. citizen, right? you are a deficit, which is how you lose the weight. >> most people should lose the weight before they exercise, by the way. if you take our coaching network of 11,700 coaches, they focus on healthy lifestyle. we want you to lose weight and keep it off. --ce you lose it with b for ancan go to the gym hour, but it is the other 23 that matters. >> let's bring in gina martin from wells fargo. the affordable care act has an effect on these health care companies and businesses. there's a provision in the law that makes it worthwhile for companies to run wellness programs. is it good overall for health care companies earnings? yourthink it depends on
view. in the short term, it has been very difficult because implementation of the law has been very difficult. variable.are high and it is been difficult for health care companies and businesses who provide health care for employees to navigate the system. run, just the simple fact that we have more people dinning older, utilizing health care, it is great for health care companies. nice, natural long-term revenue stream. >> michael mcdonald, have you benefited from the idea of companies running wellness programs? frome of our board members baltimore, they offered all of their employees $200 a month for six months to use medifast. their combined and play bass lost over 700 pounds. -- employee base lost over 700 pounds.
it will help them get in shape and eventually lower health care costs. we are starting to see companies get that, where they can help their employee base and be prevented. in mexico, we're are selling our products through a pharmaceutical drug company. the amazing thing is, they sell through 6000 doctors in mexico and they sell drugs for obesity. here's a company that wants to st to help you rather than use drugs. >> what brought you to medifast? >> what brought me to the company is a fairly sad story. my brother, and i was on the board and he got esophageal cancer, and he called me and it was in october 2011 and asked me to come take over because he had six months to live. he passed away six months after i got to medifast. xeroxworked directly a for 10 years.
it was great helping me go to itifast and take over, but has worked out well. my niece is 35 inches president of the company. we are a new york stock exchange company, but our family has had a great impact on his business. >> and are growing earnings, about 30%, trading 14 times earnings. thank you for joining us. >> i appreciate it. st.ceo of medifa coming up, why you want to exit the stock archive for one important month in our single best chart. also coming up, microsoft cofounder to locate sitting down with michael bloomberg for conversation on the importance and his efforts around the world. that conversation and 9:30 a.m. on bloomberg television. ♪
this is the storm presumably headed our way. it is expected to fall starting at noon. >> starting around noon, going through the day and the night. >> this is "bloomberg surveillance." i am scarlet fu. tom keene is in switzerland where probably has already been snowing for months. >> air used to that. it's not like we're going to die here, but we are going to have a lot of snow. calling's army chief for calm after attacks on antigovernment protesters injured 70 people. escalating violence comes as opposition leaders try to force the country's prime and his or out of office before elections scheduled for february 2. they want political reform before the elections are held. german investor confidence tumbling for the first time in six months. high.g from seven-year the drop caught economist by surprised all stop they were predicting an increase in the
index. germany has been relying on domestic consumption. record unemployment and shrinking bank lending occurring. the drinks industry has been almost three times as much on deals this year than all of last year. in just the last few weeks, they've said it will spend $16 billion to buy beam following anheuser-busch's, $6 billion deal for rental brewery. -- oriental brewery. those are your top headlines. >> it is time for single best chart. it tracks why you may want to get out of your stocks next month. it shows the historical s&p 500 trading pattern in the first quarter of every year. at least going back to 1950. you see a pretty clear pattern emerging. but postingmarch, gains. february kind of flat. nothing really happens there. a little bitne out
here. it has been fairly flat so far in january. we continue to see a lot of optimism for stocks. gina martin adams is our guest host from wells fargo. you have been writing about this. what accounts for the february flop? >> i think much of it is, investors put new money to work and it runs out of steam by february. part of it is also earning season hits in the fourth quarter earnings season tends to create volatility for stocks as well. seasonality is often times difficult to explain and we don't always follow the seasonal patterns. so far in january, it has been a bit of a flop. >> is the fourth earnings season so much more important than the other ones? >> it is your first sort of test of your results for the year. are things going to improve? companies tend to give their annual outlook along with the fourth quarter earnings season. you confirm or deny your suspicions in anticipation of what is going to happen for the year during the first quarter.
it is not more important, but it tends to get a lot of attention. >> will that pattern hold this year? there's been a lot of talks about how stocks are in a bubble. there is a poll that found asset classes on the verge of a bubble the respondents found 42% found stocks are already in a bubble. more so than internet social networking stocks, portland in housing prices, for that matter. >> wow. this is what keeps the market moving higher is this content -- constant skepticism. >> you did not believe last year, either. we started to get skeptical last year. a lot of our worry is regarding fed policy. you can't fight the trends. it is just a matter of your opportunities for putting money to work are more and more limited and yet to be more careful in this environment. >> are there any shoeshine boys out there? do you pay attention to polls like that? does the public have a real clue and youat is going on,
could take a cue from them or are they just led by the headlines and you ignore what they do? ati think you do look investor sentiment. we do so on a monthly basis and look at a pretty carefully for signs investors have become overly optimistic or overly pessimistic. those turning points do tend to occur at the extremes in investor sentiment. i think it matters, the have to get really strong herd mentality in one direction or the other. right now we're moving toward the herd becoming more and more optimistic. it is not overwhelming, as you pointed out. there are still plenty of skeptics, that we're moving in that direction. at some point we will get to a tipping point in with the cap concerned -- and we become concerned. >> let's take a first look at photos this morning. martin lutheras king day. let's start them washington, d.c. where crowds were visiting the martin luther king memorial. there it is.
a number of people. this was yesterday when it was not snowing down there. martin luther king was first made a holiday back in 1986. there were a number of rallies and marches across the country. the first family spent the day or at least part of the day helping in a soup kitchen down and washington, d.c. >> there are the children. >> it looks like they're stuffing burritos to the people. that was one way to spend yesterday. less talk about a much sanguine, violence flaring up again in kiev. these are from over the course of the weekend. protesters attacking police. these clashes erupt the country. this was first sparked because the president decided to move closer to a deal with russia as opposed to a trader with europe. people did not like that. they've gotten angrier and angrier over the past couple of months and the ukraine president
signed a series of laws limiting protest coming even tanning protesters from wearing helmets and gas masks, which in theory they would use to defend themselves against the police will stop keep an eye on this because as the world moves to sochi, ukraine not far away, so that is a concern. where does going to send you over to turkey. a bit of a different scene. >> more peaceful. >> it is goatherd spurs -- he rders and buffalo herders bringing their animals to healing waters. supposedly, the water is able -- it has the salts, helps her animals stay healthy, gets them through the cold winter. apparently, by the way, it is 95 degrees. >> 95 degree water. >> those are not gina's -- not gina's investor herds. >> coming up, we will speak with the co-ceo sap bill mcdermott.
morning, up this microsoft cofounder bill gates will be sitting down with michael bloomberg for conversation on the importance of giving back and his efforts around the world. it is live today at 9:30 only on bloomberg television. this is "bloomberg surveillance." i am scarlet fu with michael mckee and adam johnson. one company we are watching is sap, the german business software maker. shares are falling after it came out and pushed back its profitability target i two years. shifting from traditional software licenses to cloud applications where the revenue stream. it is a little less consistent than what it used to be. in the olden days, businesses would simply buy software and buy that front. or ibm,any, like sap was able to simply book the revenue at that time. now that they are doing it over the cloud and issuing updates over time, the revenue gets
booked over several subsequent quarters and a means you to completely re-examine the cash flow. >> is a new model. a lot of companies going this direction. $20 billion in annual sales for sap, not growing as fast as it used to like the rest of the industry. --y are invested of investing aggressively. the co-ceo bill mcdermott joins us. thank you for joining us. when did you realize the old model was broken and you needed to move to this new model? sap is, we news with have had four consecutive years of double-digit year-over-year growth. but in our 2010 strategy, we essentially saw our leadership position and applications and analytics as an opportunity to go for the three biggest growth areas. one was mobile. the other was the in memory database. the disc is too slow.
finally, cloud. if you look at it from a ceo's perspective, most accountable issue is complexity. if you can collapse the i.t. stack and start investing your precious capital in innovation and simplicity and execution, the cloud is a very good deployment model. we have been accelerating that for the last couple of years. >> you had to push back your profitability targets for two years to get to this. >> well, the big thing is this. wouldn't you rather have a courageous management team that says, let's go for market share and the cloud and be the cloud 35% margin postpone ambition and absolutely capture the market share? what we decided to do is accept the cloud revenue stream, as you said, and for the first couple of years, it flattens out the margin. but by year three, it kicks in
and that is why in our guidance today, we said we will hit it, 35% ambition, by 2017, but we will also deliver a nearly 3 billion cloud company to the world. that is the largest mega-cap cloud company in the world. that is sap. we would also be the fastest growing and revenue. >> initial reaction from analysts, maybe you can get to the 3 billion target the you will probably have to make acquisitions to do it. should we be looking for you to be on the prowl? >> well, the majority of our a growthis in or get ambition, but we are proven in the past that we don't shy away from things that make sense for our customers and our shareholders. if it moves us forward, it make sense for the customer and the shareholder, we always look at it. but at this stage, we don't have anything big on the drawing board.
it is much more about business as usual for organic and tight ends. >-- tuck-ins. >> think you for joining us. >> gina martin adams, you just heard bill mcdermott. a lot of changes in technology coupled with investors do have a little more visibility now than they did last year. the economy seems to be going pretty strong. you don't have the threat of a government shutdown looming. why can't comedies get a better rate on their outlook? will as 2014ey progresses. i think earnings will improve for the index at large. i think earnings will improve terminus leak for technology and health care -- tremendously for technology in health care. i think for investors, you have to balance that improving earnings outlook with the likelihood for multiple contraction as the fed scales back. you focus on earnings this year. and generating alpha as opposed to relying on the market and beta. >> i like that.
business to lenovo. searching for growth in the cloud. legend of the american western john wayne making a comeback. giantning as alcohol bench on m&a. beatz takes on pandora, spotify, and iradio. good morning, this is "bloomberg surveillance." is tuesday, january 21. i'm scarlet fu with michael mckee and adam johnson. s,m keene is in davo switzerland. our guest host, ceo and founder of beta works, investing in companies such as pinterest and twitter. first a morning brief. s&p.it leader -- unilever,
we just spoke with the ceo bill mcdermott from germany who said he has a long way to go. give him another three years, and they will be able to do it. the u.s. in full swing. before the bell, verizon, delta, johnny john -- >> johnny john? >> johnson & johnson. if only my grandfather could have been one of those johnsons. and texasbell, ibm instruments. they're coming after the bell. also, it has to be on your radar, 9:30, not because of the open, but because delegates will be sitting down right here with bloomberg lp founder majority owner mike bloomberg. that is right after the opening bell. the federal government is shut down -- not because they could not agree on anything, because they could agree there was too much snow. that is the concern. >> it is not even there yet. >> that is washington.
we learned in new york a few weeks ago maybe we weren't ready. they're expecting six inches of snow in washington. >> here, eight to 10 in new york. 12 inches in boston. >> snow day and washington, d.c. in the meantime, let's get to company news. >> a rebound in emerging markets, boosting unilever, saw quarter.e 4.1% last annals were forecasting 3.9% gain. sales in emerging markets have been slipping but rebounded with an almost 8.5% growth rate in the quarter. lenovo, ibm talking. lenovo is looking at buying a low-end server business of ibm according to a person with knowledge of the matter. the assets are said to be worth from $2.5 billion to $4.5 billion. a deal might be signed within weeks. verizon and intel have done a
deal. verizon buying the chipmakers pay-tv startup. the service is designed to provide pay-tv programming over any high-speed internet connection. no word on a price that. that is today's company news. i'm sure we will get a price offering. >> definitely. our guest host for the hour is ceo of beta works. he has invested in a couple of small startups. you may of heard of them, tumbler, twitter. mike just went through a couple of deals. intel and lenovo. which is a bigger deal here in terms of changing the game? >> i think the lenovo deal. i think the transition to the cloud and how the big sort of traditional technology companies are making the transition to the crowd -- cloud is a huge shift
that is taking place. i think the verizon-intel deal is interesting, but verizon is under investing in violence, santos even becoming a significant play on the tv side s come a so i don't see them becoming the second of 10 significant player on the tv side. i think you're focusing a lot of their energy on their wireless business. for them right now. >> you mentioned the move to the cloud been important. sap ceo.poke with the there are the process of doing it. does this raise the barriers to entry for the tech start up company if the big guys are going to be doing this? >> i don't believe so. the tech companies start off of
their infrastructure in the cloud. what is happening is there so much disruption taking place and change taking place in all of the services. whether it is infrastructure services. fore are tons of niches startups to play in. as these companies are making this transition, there's a lot of room for disruption. some of them won't make it. >> bill mcdermott was telling us they're looking for companies to acquire. will that be the growth model as these companies come in? and they end up as part of a corporate family. >> i think there will be a lot of acquisition activity in this midmarket level. i think it is critical these companies build the infrastructure to be able to work and make acquired companies part of the whole, which is a hard thing to do and some of them don't have that dna. >> john, we always talking about the cloud.
an ibm getting out of hardware in effect, sap in some ways shifting. i mean, who is still doing old tech well? it still matters. you have to have types, plumbing. >> there are a couple of schools of thought here which have dominated. there are a couple of them in complete conflict with one another. there's one school of thought, you go software. you just go software. another school of thought, on the consumer side you see coming is like motorola, google, acquiring motorola and going into hardware. you see the moving into the hardware chain. this question of at what point can you say your services and your business, your business lines are delimited, it is is a complex one. >> the guys who created nest
came from apple. it has to be sexy. you take a thermostat and make it look good. now make it smart. it knows your habits. like old tech has to be as sexy as new tech will stop >> thermostats is classic. your traditional thermostat wasn't sexy. the guys came along and build is amazing thermostat. misbehavedthey during the polar vortex. other than that, i love it. technology.lever what you see happening is this wave of software driven technology is beginning to reinvent the kind of dumb hardware we have in our lives and that we have in our homes. i think what is missing today is the degree of dependency that we have as human beings on these things. it is not fully appreciated.
an interdependency that they have with one another on the data side is not appreciated. >> i want to bring in some results from a poll that luber conducted last week. they asked respondents which asset classes are all ready in a bubble. the answer was 38% people found the internet and social networking stocks are already in a bubble. 41% said not yet, but on the verge. 14% said the bubble is not forming. that beat out london housing prices, u.s. treasuries and credit markets for asset classes that are already in a bubble. you talk about technology getting the attention. has the enthusiasm gone too far? >> i don't think so. there's so much more that still needs to happen. or has been inflation definitely in prices, asset prices. i do think today it is very uneven. you can go across a particular category and you don't see a uniform inflation. you just see it in selected areas. >> bits and pieces. >> in 2014, given the success
twitter had in 2013, we will see a rush for the public markets and that is going to transform the whole sector. because right now we still have most of these companies are private and the price is kind of what he but he will pay for private investment in these companies, which can often get very inflated. >> that is certainly something we will keep an eye on, companies buying up these private companies and really monetizing on that. mike, do we have any interesting economic data reports coming out today? >> not today. it has been kind of a slow period after the jobs report, but it is a very slow week. we don't get anything until thursday when we get the jobless claims numbers, and those aren't even huge. existing home sales at the end of the week will be the highlight. >> ok, that will be the highlight. in the meantime, futures are a little elevated right now. >> a bunch of optimism ahead of
ibm, texas instruments coming out after the bell. it is back to the earnings story. we got no data. thank god we've got no washington in the way. >> they're taking a snow day. >> and nasdaq futures are up almost half a percent. that is the biggest gain of the day so far. >> that is the setup of this holiday shortened trading week. coming up, you always did they mess -- john wayne loved bourbon, coming up, new high proof proof on that. don't miss out, bloomberg exclusive with bill gates. he will be sitting down with mike bloomberg today at 9:30 a.m. on bloomberg television. ♪
>> later this morning, bill gates will be sitting down with michael bloomberg for a conversation on the importance of giving back and his efforts around the world. both of these men giants in the world (three -- of philanthropy. this is "bloomberg surveillance." our guest host for the hour is john borthwick, the ceo of betaworks and experts on all things media. speaking of this conversation coming up at 9:30, the bill and melinda gates foundation
published their annual letter this morning. there is a great quote i wanted to bring up that talks about how the future is not preordained. he'll gates is really focusing the letter on how to make progress for the poor and how there are a couple of myths that get in the way -- he is talking about improving the world through philanthropy, the importance of giving back. but it sounds like something would say in the world of technology, isn't it? >> the question is, how much technology do you need to solve some of these problems, and how much is just small gestures? a lot of people in the anti- poverty field feel it is the small gestures, teaching the man to fish aspect, rather than creating a better fishing rod. >> in other words, clean water, access to food, basic netizens -- not reengineering seeds, etc.
>> one problem they had in africa fighting the aids epidemic was not just the drugs they needed, but they did not have the medical infrastructure. not enough trained doctors and nurses to deliver it. >> john borthwick, bill gates is very active in philanthropy, but you reckon there are other things he money to work on as well. >> let me just pick up on that point. i think the idea of the low-tech solutions to a lot of these things. i think what we've seen in the last 10 years is a whole wave of what i would refer to as nondependent low-tech will stop a lot of the technology we put in is very dependent upon our infrastructure, whether it is conductivity or utility reimage and clean water. there is a lot of technology that has been deployed and invented which is just self- contained, where you can just give people a unit which they can use in their village. it is not dependent on these
other things. i think the gates foundation has in thisarkable things area. >> something we will continue to monitor. coming up later this morning, bill gates will be sitting down with michael bloomberg for a conversation on the importance of giving back, their efforts to change the world. we will be monitoring that ahead of the 9:30 conversation and commit good morning, everyone, from new york city, this is "bloomberg surveillance." ♪
demonstrations. protesters bombarding police with molotov cocktails and police returning fire with smoke bombs and rubber bullets. the protests have rocked the review craning capital since last or after the rejection of a cooperation agreement with the european union. the united nations taking back its invitation to iran to attend the stocks on syria. the invitation to iran angered leaders of syria's opposition as well as the u.s. the peace conference is scheduled to begin tomorrow in geneva. a delegation representing syria has opposition will attend. president obama will meet with pope francis in march. the news comes as the white house releases the president's upcoming travel schedule in addition to the vatican city stop, the president will visit the netherlands and belgium as well. those are our top headlines this morning. >> the duke is back. the late john wayne icon of american westerns as a new bourbon scheduled to hit the youves in a few months, and
think about this for a moment and wonder, how is it a deceased hollywood star can actually break into the intensely competitive alcohol market? i tell you what, we're joined by the executive editor at food and wine magazine. when i first heard about this, i thought it was a joke. they are totally serious. >> it is impressive. it is a team of between the wayne family and jason woodbridge, a top-level napa valley winemaker and also a huge john wayne fan. it is going to be good stuff. wayne is to one of the most popular movie stars in america. every year on the pole, he doesn't ever leave. >> millenials like him. >> he is a worldwide brand. interestings an play and good bourbon. it is not out yet. they're launching it in a month or so. space ine craft
distilleries is booming right now. >> whether it is bourbon or beer. beer started off the craft brewing or distilling thing and now because they deregulated the process of getting permits for distilleries in many states, there are like 50 -- >> bourbon doesn't have to be made in bourbon county, kentucky. >> whiskey to be made anywhere. you can make terrific whiskey in japan. the centauri people -- >> $16 billion deal last week were the japanese spirits maker buying beam. >> you know my drink. >> it is a big deal. it is interesting. all the needs beam and big -- 10 years ago, i felt like was the only guy i knew ordering makers mark.
now you say -- what is it about bourbon? >> it is taken off. it is taken off in the past couple of years and particularly. " little bit of the "mad men effect with the cocktail. it has grown in popularity both in u.s. and internationally. centauri needs something because the japanese market is shrinking. they want access to beam to hit the u.s. market. they are a have a relationship in asia and this will help them out in asia. all of the big distillers are in asia. that is the sort of golden plates for growth right now. >> isn't one area also female drinkers as well? >> absolutely. >> what are they doing to appeal to me? >> they're doing a lot of flavored whiskeys like cinnamon flavor whiskeys, sweeter whiskeys. a lot of those are aimed at the female market.
a lot of marketing directly to women. for the whole thing was once an all guy thing and thecocktails -- not just cosmopolitan or something like that, but across the board brown spirits women are interested in, too. it is an adjusting sort of shift of demographics. >> interesting to combine -- adam was talking about however but he is buying up everybody and it almost seems like there's nobody among the big layers left to merge. you're talking about the craft brewers coming up. is that the future? >> it is a part of the future of the space. craft a stiller is still only about 1%. it is small at the moment. there's a lot of little craft brewers in the number is growing rapidly. in terms of the big guys, the big ones left are all family owned.
will they sell? that is the question. so far they don't what to sell. >> bacardi is family owned. >> they're not selling any time soon. there are a lot of little guys popping up everywhere. >> like the duke. you can read all about the new duke bourbon and the upcoming issue of "food and wine" magazine i believe in april. thanks for joining us. >> i pleasure. -- my pleasure. >> coming up, beatz music launches today. that conversation coming up on "bloomberg surveillance." ♪
johnson. don johnson is the las vegas whale who wins millions of dollars by playing back-check -- blackjack. he does not lie and cheat, how does he do it? trish regan found out. knows, the odds are not in your favor. the house always wins, roles are set in stone. play the big six wheel, right in the front of the casino, you do not have a chance. is ceo of mgm, which owns one third of the casinos on the vegas strip. >> you will spend about $1000, we will win $200 from you, about 20% of the money. average, you will lose 20% of the money you play. what if you could change the rules and twist the odds? >> they will negotiate for high end players. johnson $115 million in
atlantic city and a single winning streak. >> i beat big. >> he is an industry insider who knows exactly what to negotiate before he steps in a casino. for starters, big bets. >> they were letting me play $25,000 a hand, $75,000 a swing, it is not hard to win $4 million. >> it is not hard to lose $4 million. >> i did not have $4 million to lose. >> he negotiates a 20% rebate off of all of his losses. he turns his attention to the rules of the game. >> walk me through the rules that they were -- that were so advantageous. thetanding on soft 17,
dealer gets an ace six, they have to stand on that hand instead of taking another hard. doubling on any two cards. >> doubling your bet? >> yes, some places have rules that do not allow you to do that. splitting hands of the forehands. >> even with this, the house still had a tiny advantage. >> there is a house edge built in. don figured out how to tip the game in his favor. >> be better than the dealer. >> if you can beat the dealer, you can beat the house. >> not enough players come in that they are going to deal $100,000 a hand. >> can you intimidate them or distract them? >> all kinds of distractions for dealers, let stars -- let porn play, have a girl pose as
a girlfriend. >> to distract a dealer? >> there is always a circus going on. the more it looks like a party, the better it is for my side of the table. if there is a distraction, they make a mistake, what is the worst that can happen? i get a free bet. >> you know immediately when they make a mistake. >> i have caught every mistake they has made that was not in my favor and make them give me a free bet. onit is how don johnson took the casino industry in atlantic $15 million and became a legendary gambler who beat the house. >> trish regan joins us on set. i remember reading about this, did he get kicked out of a lot of casinos? been banned from every casino in las vegas. a number of them in atlantic city.
some keep calling, they think this time they can win. since i sat down with him, he has gone on to win another $2 million. >> he has since one another $2 million. >> he is a brilliant mathematician, that helps. he is basically negotiating different roles, advantages, discounts with the casinos in order to even out the game. then he says i only have to beat the dealer. mike, you heard some of his techniques, lining up with porn stars to distract the dealer. >> we thought about that on "surveillance." on what basis can they kick him out? >> they just say we're not going to let you play the game with those rules, he will not play unless he has those discounts. it was interesting for me, he taught me a lot about blackjack. my game is certainly much better. >> i am not playing with you.
great story.n, let's get you some headlines. verizon just reported earnings, $.66 per share, beating estimates. >> this is "bloomberg surveillance" on bloomberg television, bloomberg radio, streaming on your tablet, your phone, and bloomberg.com. i am mike mckee with scarlet fu and adam johnson. our just for the hour is john borthwick, ceo of betaworks. >> remember the hedge funds that dr. dre -- >> matt miller walks around the office wearing beats. >> they're introducing a streaming service today, a lot of competition. their strategy is to undercut and pandora, offering unlimited access for $15 a month, compared to just under $10 a month that spotify and pandora charge.
per user. christina joins us. those beats have a chance? >> we could talk about the size of their music catalog, the fact that people carry their playlists versus computer algorithms, other selling points. have a very innovative strategy when it comes to pricing this and who they are partnering with. they have corporate partners, at&t and target. they may not mind subsidizing some of the data usage and some of the streaming services they are providing an exchange, they get customers and they get customers in the door and to be associated with a very cool brand. it is a very innovative idea. keep in mind, they are not offering a premium model. there is no free service, no free service to get people addicted. this is what is burning pandora and spotify. they cannot get people to
transition from the free service to the premium service. >> eight dollars a month? >> $9.99 a month per individual. there is a family plan. >> john borthwick, ceo of betaworks, why can't pandora and spotify do what beats has managed to do? >> i think the corporate partnerships you are mentioning are really interesting, particularly with at&t. i searched yesterday, i was looking for the new beat service. at&t was advertising on google for the service. an ad came out, you could see they are matching services. wireless and data plans. a bunch of implications that we don't want to go into now, from a policy perspective. b's is trying to do something different. music apps are really important. we did analysis of the last couple weeks of betaworks, looking at asked people have on
their home screen. the top screen of their phone. something that fascinates me and we are fascinated with at betaworks, we want to invest in apps. >> streaming music? >> the top of the phone is valuable real estate. size that weple pulled, 49% of people have music, the standard apple music app. 16% audio.otify, numbers. high then you think that the switching costs of the services is fairly low. the playlists and the social aspects embedded. if there is a good new service, people will jump over. >> one thing i would say about it being a good service, one thing that will make the squad is i successful is the fact that they have launched the beats headphones. people know the brand as a result as how popular the headphones are. one thing that may hold them
back, one criticism against the headphones has been it is all style no substance. listener, i invest in headphones and have my own $300 headphones. that's segment of the market is growing. if you stack the beats headphones next to any other headphones in that price range, you are not going to get better sound quality or less coloration , an industry term, it means you are modifying the music quality. it is about the brand. if they can get conversion from the headphones to the music service, that is winning. the question, is the music on a quality basis that much better than what you get with pandora and spotify? >> something we will watch out for, the service launches today. >> you can download it on iphone and android. >> cristina alesci, deals and music reporter on bloomberg. coming up on "surveillance," down with sitting
sitting down with michael bloomberg for a conversation on the importance of giving back. his efforts around the world and philanthropy, today at 9:30, betty liu will be moderating that conversation. she joins us now. what is coming up. what a conversation, i am really excited to talk to both of them. does go of the biggest philanthropists in the world. >> two giants. >> what gets them up every morning, what is their passion right now? talk to bills to gates about microsoft and what is going on there. >> you will nudge him on that. >> i think. >> why he cannot find somebody to run his company. thee can solve some of biggest problems in the world but maybe not -- >> they are not the only billionaire philanthropists out givingwarren buffett's pledge. some other billionaires who are part of this, they have given
billions of dollars. the chairman of boston property will be joining us as well. ,lso, a self-made billionaire chairman and ceo of continental resources, the man who people you will like this, he discovered the north dakota shale formation. he started off as a gas station attendant. >> the american dream. >> an hour of billionaires on the "in the loop." >> let some rain on me. on "in the loop." time for our earnings calendar. verizon reported this morning, it was a beat, $.66 per share. the consensus was for $.65 a share. mobile phone users have increased spending, they had no choice, prices keep going up. verizon shares --
>> we do spend more, especially texting. >> how big is your bill? >> add in -- >> kids. >> additional money for data plans, $100 a month. >> i am spending $170. $180 at at&t. >> delta up about 3%, earnings better than expected, $.65 versus 63% -- $.63. operating revenues were better. capacity is going to increase 2% to 3%, margins are increasing six percent to 8%. an incredible story, delta has been up 50% on the year. >> earnings -- up 15%. reporting wednesday, netflix and ebay as well. john borthwick, our guest host, netflix is one everyone is
looking at because of how quickly shares have been climbing. >> they want to find out what is going to happen on "house of cards." >> comes out february 14. >> the most unremitting people in the world, "house of cards." coming up on "surveillance," our agenda when we return. this is "bloomberg surveillance" on bloomberg television and radio. good morning. ♪
>> this is "bloomberg surveillance," i am scarlet fu with michael mckee and adam johnson. our guest host, john borthwick, ceo of betaworks. some company news. about target, the ceo wants retailers to adopt a computer chip based on a system that would protect shoppers and credit cards. 10 years ago, he opposed that system. this is according to "the wall street journal." the switch of following the data breach at target a couple months ago. the chip-based card system is in use in europe and canada, people wondering why we have not jumped on that bandwagon. finland giving the claim -- giving bitcoin a thumbs down,
saying it does not be the definition of a currency or electronic payment. finland has categorized bitcoin as a commodity, you can tax it at a higher rate. imagine that. lenovo and ibm are talking, here's is why. will nova looking at buying the low end server business at ibm, worth are said to be anywhere from $2.5 billion to four point $5 billion, perhaps a deal could be signed over the next couple weeks, company news from "bloomberg west." we kick off our coverage at the world economic forum conference tomorrow, joining us now is tom keene, who traveled to get to davos, such of them. did you managed to catch any football games? caught any, swiss air could not get it on their
tvs, everybody piled out to watch it with real people at jfk. and i willee commiserate on the denver broncos go to the super bowl. here we are, the helicopters coming in, i just put out a tweet saying that matt damon and jamie dimon had arrived by helicopter, i really don't know. helicopters are very visible this tuesday as we get started for davos beginning tomorrow. >> is there a lot of snow there? >> really interesting year, all the alps, there is snow, but nothing like what we have seen in previous years. very warm, in the 40's. it is a valley that greece a lot of people feeling better about themselves. you had the deutsche bank story, deutsche bank missing the mark. a little bit of the look back 5 years and six years of the financial crisis. saw the't know if you
investor poll show that 66% of bloomberg subscribers are more confident about the world economic outlook compared to last year. do you expect davos to have some of that frothing us? -- frot hiness? isi think frothiness evident, but the world economic forum is doing everything to hold back on this, talking about any quality and the risks out there. there is a real social tenor. i know people are critical of davos, i have just written a piece for "business week" called "in defense of davos." we will have interviews throughout wednesday, thursday, and friday. erik schatzker and stephanie ruhle are kicking it off in your 10:00 hour. >> who is the centerpiece in davos, who does everyone want to hear from? >> matt damon is the celebrity
and residents this year. the leader of iran will be speaking, the kino political address. keynote political address. people want to hear from the same people every year, they brian moynihan of bank of america. don barton from mckinsey. nouriel roubini and ian bremmer. those are the kind of people, john rice, who handles international for jeff and not just,neral electric. -- j -- >> you mentioned rouhani speaking, the sanctions were lifted that you route is not going to participate in syrian talks. what does this mean for cooperation? unimportant question.
i will be doing a panel tomorrow morning. person panel, john lewis key will be in the audience, he was the lead american at the imf for years. hopkins. at johns he uses the word "macro prudential." that is not happening in basel, in banking. how are we going to jumpstart ordination? >> tom keene from davos. >> wish you were here. >> say hi to matt damon for me. we will be checking in throughout the week. act in new york, time to look at our agenda, the stories shaping the day. bm, and absolutely huge story. reporting earnings this afternoon, fourth-quarter report
on news and novell is in discussions to acquire the low end server business. ibm shifting business from hardware into software. the notion of the cloud. consistenteen a threat to our discussions, you can go back to the beats story, that is a hardware-software story. what is consumer, one is enterprise. you can see the dynamics between hardware and software. >> the ability or inability or lack of awareness to get different entities talking to one another. that sounds like what you're focused on. >> and disease meeting devices. during one of the breaks, i told ru about wendy polar vortex -- when the polar vortex rolled a software update to the nest. >> a glitch. producinges are
products that are fundamental to our lives. i remember when the pilot crisis uppened -- when the dial crisis happened, people at aol were asking how have we become so important, i thought we were for fun. i know the nest guys never thought thermostats were fun, these are core items embedded in our world and our homes. the dependencies at the data level are profound. >> something you and the nice people will be interested in, the weather, a winter storm going to be big. 6 inches in washington, shut the federal government down. york is the new maximum forecast, 12 inches in boston. we joke about the weather, it has business implications. almost 3000 delays
already built into the system. airlines have canceled 2267 flights as of today. they are preemptively canceling to get planes out of the snow areas so they can get them back in service as quick as possible. outhen economic data comes later, expect people blaming things on the weather. >> retailers will blame it on the weather, some people were going to go shopping and buy winter clothing. got toy agenda, it has be bill gates. he will be on bloomberg this morning at 9:30, a conversation with him and michael bloomberg to discuss philanthropy. how they plan to change the world, our twitter question of the day. what would you ask mr. bill gates? some of the answers. shows you about our audience. "who is the next microsoft ceo." they want his take on tech.
can if largest raise money using a social network?" "what do you think of windows 8." john, what would you want to ask bill gates? >> a lot of questions about microsoft, his attention is on public health. is doing there is a fabulous. going back to microsoft, it is remarkable how quickly the company has become, on the consumer side, our business. next to irrelevant. >> still somewhat relevant. >> if it was not for skype, we would not be touching microsoft products. the people i work with. >> surface was an attempt, has not really worked. the stuff,ces, all they have got so much to do. list for thedo
>> good morning. it's good back to work. i stayed up for six hours playing bejeweled games last night. >> i wish i could stay up doing that. >> it was a holiday. i was getting ready for the new arctic vortex. , mike bloomberg, going to be joining us. only are you doing this, but you're going to be moderating the conversation between bill gates and michael bloomberg. were you trying to think of questions and how to do all this? come a scenario like this you just say, it is a conversation. >> yeah, right. >> with some pretty big figures. we've been waiting 12 years for this to see the mayor o